If you’re searching for a good long term dividend ETF to add to your portfolio, you would have definitely come across the Schwab U.S. Dividend Equity ETF (SCHD).
While it has performed well historically, it is currently underperforming the broad base S&P 500 index.
Does the SCHD ETF deserve a spot in your portfolio? How much dividend yield can you expect? And will the ETF deliver growth overtime as well?
I try to answer all those questions and more here, and hopefully help you make an informed decision as you build your ETF portfolio.
What is SCHD ETF?
The Schwab U.S. Dividend Equity (SCHD) ETF is a low-cost exchange-traded fund that aims to provide investors with exposure to high-quality U.S. stocks that have a history of paying consistent dividends.
SCHD tracks the Dow Jones U.S. Dividend 100 Index which selects top 100 US dividend stocks that:
- have been paying dividends for at least 10 years
- have strong fundamentals in terms of cash flow to total debt, return on equity, dividend yield and 5-year dividend growth rate
As such, you get to own a portfolio of high quality dividend stocks that are capable of sustainable payouts.
Key Features of SCHD
- Expense ratio: 0.06%
- Dividend Yield: 3.64%
- No. of holdings: 104
- Assets Under Management: US$46.03B
- Inception Date: 20 Oct 2011
SCHD’s historical performance
At the point of writing, SCDH had delivered:
| 1 Year | 3 Year | 5 Year | 10 Year | Inception | |
| SCHD Market Price | -0.48 | +16.61 | +12.08 | +11.67 | +13.08 |
Did SCHD beat S&P 500?
If we are looking purely at price movement, this was how SCHD performed against the S&P 500:
Here’s how the performance would be if SCHD dividends were reinvested:
SCHD’s Dividend Yield
I’ve extracted SCHD’s historical dividend payouts since 2013:
| Year | Dividend Payout (USD) |
|---|---|
| 2013 | 0.7045 |
| 2014 | 1.0469 |
| 2015 | 1.1466 |
| 2016 | 1.258 |
| 2017 | 1.3457 |
| 2018 | 1.4393 |
| 2019 | 1.7242 |
| 2020 | 2.0284 |
| 2021 | 2.249 |
| 2022 | 2.5615 |
For those who prefer to look at charts, here’s SCHD’s historical dividend yield:
What is the dividend growth rate for SCHD?
We also plotted SCHD’s dividend growth rate based on its historical dividend payout;
SCHD Top Holdings
At this point, you might be wondering about the type of stocks you might find in the SCHD ETF portfolio. Here’re the top 10 holdings at the point of writing:
| Stock | Ticker | Weightage | |
| 1 | BROADCOM INC | AVGO | 5.25% |
| 2 | PEPSICO INC | PEP | 4.40% |
| 3 | MERCK & CO INC | MRK | 4.32% |
| 4 | CISCO SYSTEMS INC | CSCO | 4.23% |
| 5 | COCA-COLA | KO | 4.19% |
| 6 | HOME DEPOT INC | HD | 4.16% |
| 7 | TEXAS INSTRUMENT INC | TXN | 4.00% |
| 8 | PFIZER INC | PFE | 3.99% |
| 9 | CHEVRON CORP | CVX | 3.95% |
| 10 | AMGEN INC | AMGN | 3.83% |
Frequently Asked Questions about the SCHD ETF
You may have more questions on the SCHD ETF, here’re some common ones:
Is SCHD a good investment?
Yes. If you wish to own a portfolio of the strongest US dividend growth stocks that pays a regular dividend income, SCHD is a good option to consider.
Is SCHD a dividend growth fund?
Yes, SCHD tracks US dividend growth stocks via the Dow Jones U.S. Dividend 100 Index.
What is SCHD average annual dividend?
At the point of writing, SCHD’s average annual dividend yield is 3.64%.
What is SCHD average annual returns?
This depends on the duration you’re looking at, we’ve shared SCHD’s historical price performance above.
Does SCHD reinvest dividends?
No, SCHD doesn’t reinvest dividends.
SCHD is a dividend ETF and many would invest in it for the dividend payout. SCHD doesn’t reinvest the dividends for you, however if you wish to you can reinvest the dividends you received manually.
Where can I buy SCHD ETF?
SCHD is listed on the NYSE ACRA, brokers that provide access to the US stock markets should allow you to buy the SCHD ETF.
